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1.5 Perfect competition, imperfectly competitive markets and monopoly

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Question 42

An allocative inefficiency (misallocation of resources) is most likely to arise under a monopoly because

the firm operates at the minimum point of its long-run average cost curve.

price is set above the marginal cost of production.

barriers to entry are completely removed over time.

the industry output is maximised to meet consumer demand.

1.5 Perfect competition, imperfectly competitive markets and monopoly Questions

  1. A Level
  2. /Economics
  3. /1.5 Perfect competition, imperfectly competitive markets and monopoly